OVERVIEW

Background: Elite Racing Inc. has staged the Rock 'n' Roll Marathon in San Diego for 11 years, drawing about 17,000 runners in recent years.

What's happening: The San Diego-based company profits from the race while receiving city subsidies through its affiliated Elite Racing Foundation. The charity has made questionable payouts to the private company.

The future: On Thursday, the newly formed Tourism Promotion Corp. will consider Elite Racing's application for $375,000 for its 2010 marathon. The tourism nonprofit gives grants that are funded with fees that guests pay at most San Diego hotels.

Elite Racing Inc. has built one of the nation's largest race promotion and management companies, replicating the success of its flagship San Diego Rock 'n' Roll Marathon in eight markets across the country.

But the privately held company has profited from subsidies from the city of San Diego and questionable payouts from an affiliated charity, The San Diego Union-Tribune has found.

The city has provided discounts worth $127,000 to the Rock 'n' Roll Marathon over the past three years, according to a city analysis obtained through a public records request.

City officials estimate that throughout the 11-year history of the event, the subsidies have topped $400,000.

The subsidies stem from a nonprofit charity that San Diego-based Elite Racing created that co-hosts the event. It allows the company to cash in on a city policy to charge nonprofits only about half the cost of police services used at special events.

County Supervisors Greg Cox and Ron Roberts also have provided the charity – Elite Racing Foundation for Children, Education and Medical Research – with about $20,000 a year in grants from county hotel taxes. In the past decade, the grants total $208,000.

It's unclear what role the foundation plays in staging the marathon. Its tax records do not mention the race, nor do they reflect the discounted payments to the city for event services.

The foundation also has reported conflicting race revenues to the city and county – the amounts differ by $1 million.

The charity's purpose, according to its tax records, is to award grants. Yet its subsidy from the city last year – $41,000 – was three times what the foundation paid in grants in 2007.

The largest recipient of its payouts in the past three years has been the for-profit Elite Racing Inc., which is alarming to nonprofit experts.

Elite Racing officials declined to discuss its finances, providing only brief responses to e-mailed questions. They contend they pay the full cost of police and fire services and did not address the discounts.

The officials emphasized that the city collects more than $1 million in hotel tax revenue annually from runners and spectators who travel to the marathon.